Dussault T.C.J.:
1 These appeals were heard under the informal procedure. They are appeals from assessments for the appellant's 1994 and 1995 taxation years in which the Minister of National Revenue (the “Minister”) denied him the credit for mental or physical impairment provided for in sections 118.3 and 118.4 of the Income Tax Act (the “Act”).
2 The appellant's left hip was operated on several times, once in 1988, twice in 1994 and once in 1995. He underwent one operation on his right hip in 1986 and another in 1996. He states that he is able to walk with a cane, but must rest every 300 to 400 feet when walking too great a distance. As to his ability to dress himself, he says his wife helps him put on his socks and trousers and tie up his shoes. He also says that he cannot work and that it is his wife who performs both the indoor and outdoor household maintenance work.
3 The appellant's brother also testified that the appellant spent 39 days in hospital in 1994 and that he had to use crutches until 1995. He also stated that the appellant was unable to shower alone when he left the hospital.
4 The first form completed by Dr. Serge Gagnon, dated April 12, 1995, indicates that the appellant could walk with a cane and that he could also perform all the other activities of daily living except dressing himself, since he answered neither yes or no to the question concerning this activity. However, he indicated that the impairment lasted or was expected to last, for a continuous period of at least 12 months and that it was severe enough that the appellant's ability to perform a basic activity of daily living was restricted all or almost all of the time, even with the use of appropriate aids, devices and medication, or therapy.
5 A second T2201(F) form dated October 5, 1995, was completed by Dr. Gagnon. It contains the same answers as in the previous form, except that, this time, he answered “no” to the question whether the appellant could dress himself with the aid of a device, if necessary. As to his ability to walk, there is no indication this time that the appellant needed a cane.
6 Counsel for the respondent filed the two T2201(F) forms completed and signed by Dr. Gagnon, without attempting to dispute the validity of the answers recorded.
7 Thus, in view of the forms filed, counsel for the respondent contends that the appellant's ability to walk was not markedly restricted. And, without directly disputing that the appellant's ability to dress himself was markedly restricted, he nevertheless contends, since the appellant was able to feed himself, that the conditions stated in paragraphs 118.3(1)(a.1) and 118.4(1)(b) were not met in that the appellant's ability to perform a basic activity of daily living was not markedly restricted. The argument is first based on the premise that these exception provisions must be interpreted in a narrow if not restrictive manner since the object of the Act is essentially to levy taxes. Second, counsel for the respondent claims that Parliament deliberately limited access to the credit for mental or physical impairment by specifically enumerating the only activities that an individual must be incapable of performing, to the exclusion of all others. Lastly, he contends that including “feeding and dressing oneself” in the enumeration of these activities in subparagraph 118.4(1)(c)(ii) constitutes a requirement that the individual be unable to do both things, which must be considered as a single activity. In his view, the word “and” is thus necessarily conjunctive and not disjunctive. Counsel for the respondent thus disputes the validity of certain decisions of this Court, in particular those of Judge Bowman in Radage and Lawlor as regards both the appropriate interpretation in the circumstances and the disjunctive nature of the elements in the enumeration of the basic activities of daily living given in paragraph 118.4(1)(c) of the Act.
8 In Lawlor, supra, Judge Bowman succinctly reiterates certain elements of interpretation which he had proposed in his judgment in Radage, supra, stating, in particular, the following:
I should also say something about approach that this Court should take in these disability cases. They are small cases. To the taxpayer they mean a fair bit, and I've seen many of them and I can say that it breaks my heart to see the state some people are in and sometimes they just don't make out their case. But I think that is important that this Court bear in mind the very restrictive nature of Section 118.4, and to the extent that we can, that we alleviate against that strictness and that we approach the matter with a degree of compassion and understanding that achieves the objective of this section.
9 Judge Bowman states the following as to the question whether the word “and” used in subparagraph 118.4(1)(c)(ii) is conjunctive or disjunctive:
Feeding and dressing oneself -- counsel for the Minister, Mr. Bundy, in a very able argument, suggested that feeding and dressing both had to be activities that were restricted. In this I take it he means, or he is suggesting that, “and” is conjunctive rather than disjunctive. This is a matter of interpretation. I think that, and I don't have authorities in front of me, but I think that in some cases “and” can be conjunctive. In some cases I think it can be disjunctive. Here I am adopting a purposive, or what is called in one case a “teleological” approach, to the interpretation of the statute, that is, an interpretation that appears to be consonant with the scheme of the Act and the objective that the statute is endeavouring to achieve. I think it is more consonant with the scheme of the Act and with the object of this section that “and” be construed as disjunctive and therefore either feeding or dressing is sufficient. It need not be the two together.
10 In Dippel, supra, Judge Bowie adopted the same approach on both points, while acknowledging that it is clear from the amendments made to subsection 118.4(1) in 1994 “that Parliament intended the deduction to be available only to individuals who suffer from the most extreme disabling conditions”.
11 To date, the various elements identified as basic activities of daily living in paragraph 118.4(1)(c) of the Act have been analyzed disjunctively, although some are grouped in various subparagraphs. I find this interpretation consistent with the scheme of the provision which must be understood in its context without any attempt to restrict its effect unduly. I will take the liberty here of expressing my disagreement with the opinion advanced by counsel for the respondent that the interpretation should be made solely in a manner consistent with the main objective of the Act: to levy taxes. Moreover, this opinion, need it be added, is contrary to that stated in existing tax case law. To be convinced of this fact, one need only refer to the remarks by Gonthier J. of the Supreme Court of Canada in Corporation Notre-Dame de Bon-Secours,where he said:
In light of the foregoing, I should like to stress that it is no longer possible to apply automatically the rule that any tax exemption should be strictly construed. It is not incorrect to say that when the legislature makes a general rule and lists certain exceptions, the latter must be regarded as exhaustive and so strictly construed. That does not mean, however, that this rule should be transposed to tax matters so as to make an absolute parallel between the concepts of exemption and exception. With respect, adhering to the principle that taxation is clearly the rule and exemption the exception no longer corresponds to the reality of present-day tax law. Such a way of looking at things was undoubtedly tenable at a time when the purpose of tax legislation was limited to raising funds to cover government expenses. In our time it has been recognized that such legislation serves other purposes and functions as a tool of economic and social policy. By submitting tax legislation to a teleological interpretation it can be seen that there is nothing to prevent a general policy of raising funds from being subject to a secondary policy of exempting social works. Both are legitimate purposes which equally embody the legislative intent and it is thus hard to see why one should take precedence over the other.
12 Above all, it is important to recall what the Supreme Court of Canada has considered, particularly in Stubart,as the modern rule of interpretation, as stated by E.A. Dreidger:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
13 The basic conditions stipulated in subsection 118.3(1) for an individual to be entitled to the credit for mental or physical impairment are first that the impairment be severe and prolonged and that its effects be such that the individual's ability to perform a basic activity of daily living is markedly restricted.
14 Paragraph 118.4(1)(a) specifically states that an impairment is prolonged where it has lasted, or can reasonably be expected to last for a continuous period of at least 12 months.
15 This point is not disputed in the instant case and I find it reasonable to conclude that this condition was met for a continuous period of at least 12 months over the two taxation years in issue.
16 Furthermore, paragraph 118.4(1)(b) specifically states the additional requirement in the following terms:
(b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual ... is unable (or requires an inordinate amount of time) to perform a basic activity of daily living.
17 Paragraph 118.4(1)(c) stipulates what the basic activities of daily living are and paragraph 118.4(1)(d) states that the enumeration in paragraph (c) is exhaustive and that no other activity shall be considered as a basic activity of daily living.
18 Paragraph 118.4(1)(c)(ii) mentions “feeding and dressing oneself”. Common sense requires one to consider whether this involves two distinct activities. Inability to perform either activity should be sufficient, as has already been held in Lawlor, supra, and Dippel, supra, in which the word “and” was given a disjunctive meaning. However, the same result, in my view, can be reached by assigning a conjunctive meaning since the impairment is naturally defined in a negative way, that is to say it is expressed as an inability to perform an activity. In this sense, the inability to perform one of two things implies that one is unable to perform the whole of the two things or that the inability to perform only a part of what one wishes to consider as a single activity clearly prevents one from accomplishing the whole of that activity.
19 That point being established, I return to the evidence submitted. The appellant underwent three operations during the two years in issue. In his testimony, he described his difficulties, in particular in dressing himself. In the second form filed, his physician stated that he could not dress himself with the aid of a device if necessary. In the first form, he had not answered the specific question bearing on this activity, while indicating that the impairment was prolonged and sufficiently severe to restrict him in performing a basic activity of daily living all or substantially all of the time, even with the use of appropriate aids, devices and medication, or therapy. As I have already mentioned, the validity of the answers was not questioned by counsel for the respondent.
20 I find it is important to make one final remark concerning the content of the T2201A(F) form. First, I would emphasize that it was counsel for the respondent himself who filed the two forms completed and signed by Dr. Gagnon, without attempting to dispute the validity of the answers provided. Now, in part B of the form, which must be completed by the physician by checking yes or no in response to specific questions on the patient's ability to perform each of the basic activities of daily living, nowhere is it mentioned that the inability must be evaluated on the basis of the significant qualification appearing at the end of paragraph 118.4(1)(b) of the Act, that is to say that the individual is unable “or requires an inordinate amount of time” to perform a basic activity. This condition moreover is the only one of those stated in paragraphs 118.4(1)(a) and (b) that is not specifically stated in the questionnaire. It is true that it is mentioned in the instructions provided to the physician preceding part B that he must bear this qualification in mind when completing the questionnaire, and presumably this was the case. However, I find that, to the extent that one wishes to obtain unequivocal answers, it would perhaps be better to ask complete questions containing all the elements stated in paragraphs 118.4(1)(a) and (b) of the Act.
21 I have come to the conclusion on the evidence, but not without some hesitation, that the conditions stated in sections 118.3 and 118.4 of the Act were met for the years 1994 and 1995.
22 The appeals are allowed and the appellant's assessments for the 1994 and 1995 taxation years are referred back to the Minister for reconsideration and reassessment in accordance with this decision.
Email this Content